Ukraine Halts Gas Transit, Signaling the End of Russia’s Gas Era in Europe
Russia: Russian gas exports via Soviet-era pipelines running through Ukraine were halted on New Year's Day after Ukraine refused to renew the transit agreement. This marks a significant shift in Europe's energy landscape, ending decades of reliance on Moscow's supplies. Gazprom, Russia's state-controlled gas company, confirmed the stoppage, which followed nearly three years of conflict. The immediate impact on European Union consumers is expected to be minimal, as most EU countries have already secured alternative sources, including piped gas from Norway and LNG imports from Qatar and the United States. Hungary will continue receiving Russian gas through the TurkStream pipeline under the Black Sea, while Slovakia and Austria have arranged alternative supplies.
The cessation also affects regions like Transdniestria, a pro-Russian breakaway territory in Moldova, which heavily relied on the transit. Local authorities have urged residents to adopt energy-saving measures as heating and hot water supplies have been suspended. Ukrainian President Volodymyr Zelenskiy described the move as a major setback for Moscow and called for increased gas supplies from the United States and other European allies to further reduce dependence on Russian energy.
The halt in transit will have financial implications for both Russia and Ukraine. Ukraine stands to lose up to USD 1 billion annually in transit fees, a loss it plans to offset by quadrupling gas transmission tariffs for domestic consumers. This increase could cost Ukrainian industries over 1.6 billion hryvnias (USD 38.2 million) annually. For Russia, Gazprom estimates a loss of around USD 5 billion in gas sales due to the discontinuation of the route.
Source: Reuters